German leaders saw advantage in passing bailout fund
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Jeremy Hobson: In Berlin this morning, German lawmakers said yes to expanding the size of the European bailout fund. The vote was closely watched because the bailout fund is seen as a crucial part of solving the European debt crisis, and German citizens aren’t in love with the idea of bailing out their European neighbors.
The BBC’s Steve Evans is with us from Berlin with the latest. Good morning.
Steve Evans: Good morning.
Hobson: How significant is this vote?
Evans: Well it’s very significant. What it’s about is, in July, the leaders of the 17 countries in the eurozone — the countries that use the euro — decided on beefing up the fund to bailout failing economies like Greece and Portugal. The leaders agreed on it, then it seems people realized it had to be actually ratified by parliament; 17 parliaments had to ratify it. So, this was about the German parliament ratifying that agreement, already done for a bailout fund. It they’d said no, that would have been the end of it. It would have scuppered it, and the financial markets would have gone into a tailspin.
Hobson: And there was a lot of question about what would happen here. There’s a lot of opposition in Germany to bailouts.
Here’s a resident of Berlin speaking to the BBC today.
Berlin resident: Personally I get the feeling that they don’t really have a concept of what they’re doing with the money, it’s just pumping more and more money into it, and don’t even know why — or what to do.
So Steve Evans, why did these German lawmakers go against that anti-bailout tide in Germany and vote for this extension of the bailout fund?
Evans: Because they think if they don’t find a way of saving economies that fail — like Greece — then the whole thing shatters, the whole thing falls apart. The euro is no more, and that would be chaos. So the German government reasons, it wants the euro to continue, because it likes it politically — but also, the alternative would be very bad for everybody.
Hobson: The BBC’s Steve Evans in Berlin. Thank you, Steve.
Evans: You’re welcome.
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